unbundled rec will offset the need for fossil fuel generation from places. again, it is important how a contract is constructed. there are ways to -- there have been some in the past some utility contracts for recs that were then constructed in a way that it left you scratching your head on whether or not it reduced carbon. but if they're constructed -- >> unbundled recs. actually in that case it was constructed in a way to call it a bundled rec. they were trying to get around the way the law used to be written. there are ways you can do a contract where you scratch your head and say it's done. if the rules are done right and they're monitored right and the people procuring the electricity aren't being cute, it doesn't matter where if it's a bundled rec or unbundled rec for carbon reduction. >> i don't want to put you on the spot about a report you

hadn't read. there was a report around in san francisco called what the heck is a rec. something like that. have you -- >> i have not. >> you haven't seen it. which contended that unbundled recs had less of a market -- didn't generate -- i'm probably going to sort of do it wrong. it's complicated. they were basically arguing that unbundled recs didn't -- were less likely to come from new power plants, i think, or -- >> that's actually a good point. right now that is true and that is something i failed to mention. if your goal is to immediately incentivize the creation of new power plants, there is some skepticism out there and sometime short term there is some evidence that rec transactions only are not enough to create new power plants.

but folks building the power plants, it's an expensive endeavor. they need long-term transaction, long-term deals in order to finance it. recs are typically a short-term transaction so they aren't -- the financing is not there. however, as market street grow and mature, having some ability for some amount of recs does help the market out. as ms. malcolm mentioned, the utilities right now are actually -- pg&e, southern california edison and san diego gas and electric are actually selling recs because they overprocured which helped finance investment and they knew they had a place to sell some of that over procurement so they aren't buying more renewable resources than they need for compliance purposes. so, it does help some. but if you want a program that's simply new resources, you either need to say you can say a rec from a new resource. the way the law is written now

it's not a rec from a new resource. >> so, one of the things that i've been struggling with is how do you compare the greenhouse gas reductions from a new resource versus an old resource if you're buying pass rate, power from a new resource versus an old resource. instinctively, one would think that the more new resources the better. but i guess i'm sort of a bit -- i'm not quite clear on that because all-new resources become old resources at some point. if you just buy from new resources, then what happens to the -- when they get old. you don't buy from them any more? how do you think about this in your -- >> i think about this a lot. hopefully it won't impact clean energy san francisco for a little while. some of the procurement the utilities do now are from geo thermal plants that have been around for a long time and it does count when those contracts come up. in order for the utilities to continue to have a balanced

portfolio, they're going to need to continue to buy some of those geo thermal resources. we don't want to create a system where a plant that's 10 years old that falls out of contract can't get a new contract. so, you do need to as we buy more and more renewables, have someplace for the old resources to sell. given california's ambitious goals, i'm not afraid that we're going to stop building new resources any time soon. we're at 33% goal now. there is talk on a statewide level of 40 or 50% goal. i don't think that's a concern with a rec only transaction. i think with the city and county of san francisco needs to look at is what are the local impacts of a rec only transaction. ~ what >> the next question about unbundled recs, rec stuff isn't intuitive to me. so, rooftop solar generates

unbundled recs and that -- in california rooftop solar generates some unbundled recs. [speaker not understood] to me with the whole structure because rooftop solar is delivering in california, it's in california, it's renewable, it's all this good stuff, yet it still gets thrown into this third bucket? >> it does. and that gets back to the point at the beginning that rec at its core is simply a measurement and compliance tool. and the reason why rooftop solar only delivers an unbundled rec is there is a puc provision that says -- a california public utilities commission be, not confuse things. california public utilities commission provision that says the owner of the solar panel for rooftop solar owns the rec, not the utility. so, the utility takes the legislate.

the customer owns the rec. so, at that point by its nature, it is now an unbundled rec by the nature of the puc rules. the reason why we set those rules up that way is to give the more economic value to the people putting solar panels on their house. if they own the recs, the idea is hopefully some day they would be able to sell those recs into a market just like anybody else and that would give additional value to the solar panels. >> and, so, if san francisco were to do a lot of local buildout of solar power plants, they would not be able to count those -- that power as bundled or -- how -- >> that's an interesting question that i can't answer. as i said, that's not a california public utilities commission rule. that would be a clear issue for pg&e since we directly regulate them. our regulatory relationship with a community choice aggreoror is very regulatory

like. i don't know how our rules on who owns the recs under cfi would apply to something like clean energy san francisco. but it is possible if that is the scenario. >> commissioner king has a question. let me just ask a quick question. i'm going to ask a quick technical. we're going to lose anybody that's following this question. i would like to ask one technical and one kind of more from a community perspective kind of question. if i may, commissioner king. >> just briefly. >> one, everyone agrees solar in terms of the renewable word, great. no controversy with respect to a solar rec, say. biomass, a little bit more controversial. in what you're talking about from the perspective as the director of the energy division of the cpuc, a rec pertaining to solar, same environmental qualities as a rec pertaining to biomass, yes or no?

>> i'm going to tell you by statute, yes. [multiple voices] >> i've got some good friends that would say with respect to biomass -- >> yes, biomass, some biomass burns stuff. so, it potentially does create carbon. however, other bioenergy would actually reduce carbon such as the newer methane which would take the methane out of the environment which is a far greater greenhouse gas than carbon. >> and then just the last quick one and we'll go to commissioner king, which is when i began back in 2008 to work around this program when we had an advocate, you talked about the local generation, the local health benefits, the local opportunity to move an economic and environmental justice agenda and doing all those things. so, definitely attracted to the

idea of doing that and still. and i remember working with folks, and we even got into -- almost got into it, so to speak, with the head of the san francisco public utilities commission, mr. ed harrington, like a year and change ago because -- actually a bit earlier, san francisco at that time was talking about recs and maybe looking at something like that. a lot of us as advocates were saying, not into it. you know, whether the policy -- it sounds like there's questions around the statute anyway, at least for some environmentalists if it's looking at solar and biomass, environmental qualities, that could be a big debate. with respect to owning a generation, which we still want to see from what we do with this program, and that's what we're talking about. ultimately, san francisco, the general manager of the sfpu crushtion, ed harrington said in response to those of us driving this program ~ that recs are not real green power

and san francisco won't do recs because recs are not real green power. and now i know we're back and there's some reasoning and thoughts about this. but without putting you into, you know, sfpuc and cpuc and you're the director of energy division. but what would drive someone, a very respected official to stand up and basically say what's kind of happening here with recs is not real green power? what's the answer back? because people are talking about that. >> i very much don't want to get too much into the middle of the actual plan for clean energy san francisco because i really don't know the details of the current iterations of it. it does come down to what your policy preferences are, though. it is purely a carbon reduction policy preference, an unbundled and a bundled rec shouldn't make that much of a difference. and then it's important to emphasize that what makes the

biggest difference is what does the rec come from. i mean, the question about solar panels in san francisco is a great example. so, there is -- solar panels are being installed in san francisco today under combination of rebates from the city and county of san francisco and from the california solar initiative. you know, pg&e takes that power through an energy metering transaction. the rec is, as you've mentioned, is an unbundled rec. and that was designed in a way that hopefully down the road creates more economic value and more incentive for the solar panel. so, in that case, having an unbundled -- an unbundled rec could help promote one part of green energy which is self-generated rooftop solar. there are other traction transactions where it wouldn't look so good. >> thank you. any other questions? >> i just want to -- wait,

commissioner king. >> sure. i fear asking another question and get a lengthy answer. i'd like to speak for people who don't follow this stuff every day. so, i'm going to ask a very simple question. does a rec, this unit, use the count renewable energy, right? does that mean that when san francisco purchases a rec, right, that we're getting a unit of a megawatt of energy from the same place that we're getting the rec from? >> no. >> no. >> if you buy an unbundled rec, no. >> okay. so, you know, because i feel like i understand a rec until we start talking about recs again. [laughter] >> so, and i think that a lot of times we sit here, and those

of you that are a little more familiar with this than others, will start talking about this. and i just want to be very clear. when people say, okay, we're going to have 75% of our program being recs, right, that means that, you know, sf power or, you know, rcca is going to be purchasing not necessarily units of energy, but just the tax credits, if you would, the credits from energy that's being produced to go to somebody else. >> yes, that's true. the important thing to remember, not to get into physics, because you'll lose me if i start talking about physics, too. but remember, the individual electron never makes it here either. so, for example, power from hetch hetchy which is used to run muni isn't actually the electrons produced by hetch hetchy. hetch hetchy produces the power

on pg&e's grid. they have an arrangement with pg&e and some pg&e power gets here to run muni. pg&e is tracking that on either end so they know how much power came on, how much is off in the balances. with a rec, the power is going on to offset somebody else's load and the rec is going to you. so, it's not like that power goes off to the ether and isn't used anywhere. it does create a benefit and that other person who is buying that power would have otherwise bought in california, would have otherwise bought system power which is largely natural gas. i don't think i helped by your facial expression. [laughter] >> so, it's a trade-off. it's a trade-off. >> correct. >> you sell energy to this person because they're closer, and they sell energy to me because i'm closer. >> yes. >> okay.

>> all right. >> there should be a science to take things like this. somebody should have like a masters to be able to take things like this and be able to speak plainly to people. >> yeah, i think that's why people sometimes look to the commission on the environment, particularly with this new type of approach that kind of builds on the partnerships that have been established over time and the work of our team. it also really tries to go further with respect to low-income communities, communities of color, economically disadvantaged communities, environmental justice neighborhoods. and if we go in and just have that conversation that we just had right now, it's over. it's over. and that's what i think general manager harrington meant when he said people want real green power, power that they can see and feel. in a moment we're going to go to public comment. we need some folks out there to

explain where this is at, and where this is going because i remember railing on recs as an advocate because it's not the language that director randolph had mentioned about being a purely carbon -- what is it? a pure carbon reduction policy. that's not what we got. and if you look back to what we've talked about this and advocates and to the puc, i think that's what people are looking -- advocates and city government and the board of supervisors and other agencies are looking to this body to have this discussion and to take possible action with respect to our thoughts and to do that tonight. so, unless there's any other conversation -- >> since we're wrapping this up, i want to say this. when i -- i forget the consultant's name. but when they were originally looking at the different plans, the different categories of how they could do this, it said that if you were going to do

kind of in-city generation, it was going to be a higher per -- you know, higher rate. and, so, so, my assumption based on that, even when they do come back and look at just in california bundles, you know, with union and everything else, that that's going to be a higher rate. that's just, you know, because that's what i believe would come back. so, you know, environmental justice is also about, you know, not taking my trash and dumping it in your neighborhood. so, you know, when we were talking about picking up the shipyard, for instance, we were like, well, we can't just go dump it in somebody else's neighborhood. we have to be cognizant that we work object equal principles. so, i care about the power the recs were getting from some other state if they, you know, if they don't work on the same principles that we do in terms of what we pay people so on and so forth.

you know, and once again he said that these things also matter in terms of your goal. and my goal was the goal that when they first brought it out, which was what we talked about. a, kind of in-city generation, and b, jobs. because, you know, if you're going to keep pushing this along and keep asking people to, you know, okay, put money out for the general fund, and you know, we're going to put out some bonds, a few other things, there has to be an agreement with the people that they're getting something out of it, particularly people in low-income communities because they're being sold every day on tv that this green color economy is supposed to benefit. and yet every time you turn around, every time you guys turn around and look at what's being expanded in this city, whether it is this or it is the city's tech firm portfolio, it's on the back of communities of color. do you know where the hub is for all of the generation of

all of the server farms and stuff like that? that's in bayview hunters point. so, all the server farms and the big digital lines so that you can process your cell phones and everything is right there in bayview hunters point and it's not another facility in the city like that. and they have diesel generators that carry like tons of diesel fuel right in bayview. and yet we are insufficiently trained and insufficiently accessed -- you know, these tech firms. and, so, here we are. we're doing this and are we going to stand to make sure that we give the best opportunity for san franciscans to engage in this and make sure since this is such an expensive city to live n we create living wage jobs for these people so that they can. cu

~ that's what i'm about. if it's about what these recs matter in term of your, you know, what your goals are, then my goals are what they initially said when they voted on it, which was a cadillac, as far as i was concerned. now we're coming back and, you know, i'm looking at an escort, you know. so, i want the in-city bay area jobs and i want, you know, you know, locally produced power, you know, which is what they voted on. so -- >> let me just -- to put a point on what commissioner king is saying is that if we were looking for a purely carbon reduction policy, we would have done 100% recs, 150% recs, bunn it a long time ago and be done with it. but what commissioner king is talking about, the genesis of this program for me as an

advocate for environmental justice in order to win community folks, a lot of folks in this room, was to bridge the gap between the city renewable energy and not even renewable. energy future that was based around dirty power plants in southeast san francisco. the city was steering toward investing nearly $300 million in new dirty peakers. and right between bayview hunters point and potrero. >> we had to have it. >> had to have it. >> can't do it. >> there's no other way. ~ told us we had to have it advocates pushed for something real for something that has been historically disproportionally polluted. disturbing environmental justice. and this program was there because at the time it was about 360 megawatts of in-city generation efficiency when all these grand things -- and a lot of us tried to get there. and now here we are in the fall.

it wasn't the recs. what it was, director randolph, just so you know, this is what it was and what i think it still is. this is green new deal and very -- i'm not seeing any more. need to hear from folks how we get back there. what is the plan? the plan is and the draft outline next week for a number of local generation -- you know, it's not that. i mean, i have to guess there's -- it's not going to happen at the sfpuc on rate setting if you're coming in next week and saying we have to plan to investigate buying the hydro power from shell, you know. be investigating how we buy it as a city, you know, how we do this as the city and county of san francisco to have a green purchasing program to do this and get us to the green deal. you know, a draft of an outline of a plan and the jobs that we can't point to, it's not just a

carbon reduction policy. it's to be the green new deal. >> commissioner, i'd like to respond. >> we can say something before mr. randolph heads out. i thought of background as a new energy entrepreneur. i thought of recs and aaus, any type of acronym you can imagine. i really appreciate you coming in to try and make some sense of what are just incredibly complicated topics. i know that most of the people that come before us are city employees or who work in the city and they sort of have a bit of an obligation to do it and don't necessarily have to. i know you work for the state and you did this to a certain extent on your vacation time or whatever that would be. >> thank you very much. >> i just want to extend the thanks of the commission for you coming in and explaining this to us. >> i'm happy to. i'm one of those odd breeds who enjoys talking about things

like recs. [laughter] >> strange. >> okay, thank you so much. >> malcolm? >> i'm sorry, i just wanted to respond to your concerns, commissioner. i think we at the puc share your ambition for local build-out. it's not going to happen tomorrow no matter what we do. it takes some time. we do have a conceptual plan. we need to do more work on a plan. and i guess i'd ask you, it's really up to the commission at this point and the board of supervisors to decide whether they want this program to go forward. but i think you need to consider or all public officials here need to consider the alternative. most of pg&e's power, one solar power right now comes from arizona. our solar power hopefully will not. bucket 1 resources are not all

in california. they don't have to be. they have to be delivered to californ and there is a commitment -- there is a commitment because of the direction of public officials among puc staff and managers to go forward with the buildout plan given the constraints that we have and the opportunities that we'll have. >> but you know what we mean by the green new deal. we talk about jobs and we talk about doing this as a city and local renewables and all this stuff that's so exciting. it's community. it's mandatory local hiring, not, you know, the prospect of good faith. it's real engagement. it's partnership with organized labor, you know. we still have the opposition of organized labor out there. and i know the labor council organizers tried to revisit it last night and we still have not worked out at those issues. so, we want to do this.

we want to do what is in the ordinance. we want to do some of this stuff that was at the board. i mean, all this stuff -- i was coming in prepared to get real excited and it's just not happening. >> i'm still excited. i don't want to be an advocate. i want to do what i've been directed to do by my executive management and the board of supervisors. but i will say that this will provide the community with the choices and with more of a local focus on energy planning and energy resource development. >> thank you very much. >> thank you. >> do we have any other questions? commissioner king, i see you -- >> now you can read my mind when i want to talk. >> i'm sorry. >> yeah, new york city i just feel like so much of what we're doing here in terms to get to our goals, ~ i feel like we're already doing. some of the things i feel like

we've just, you know, it wasn't fully funding the solar program. the people in my community loved, we funded at 75%. i know that you're looking at folding it in. but -- or even policies. we have all these new policies, you know, running around trying to make small business owners track additional stuff with their workers while, you know, we're building whole new communities. and it's not one policy to make sure that those homes have solar on them. so, or -- so, i find it funny that, you know, we have opportunities to do, you know, a lot of that stuff now and, you know, through policy and a few other things, you know, we're missing the opportunity to create that stuff through policy that we can do now. so, you know, i get it. you know, i get it that this

will provide new cash, new cash to help with that process. but we're also spending cash right now to get this process off the ground and it's not connected clearly to even california energy. so, you know, hey, we'll get there eventually. >> any other thoughts before public comment? [speaker not understood]. >> i have some questions i'd like to ask because i think one of the things i'd like to understand is have you done any studies of how much local power could be generated in san francisco? because my feeling is that an enormous amount could be generated. and, so, how -- i was wondering if you could speak about how we go from zero to, you know, maxing out our potential. i haven't seen those studies. >> actually zero of course. >> there's no zero yet. you're quite right. [speaker not understood]. >> local power did some of that

survey. brighton beach has just given us a draft of another report that was focused on solar projects not behind the meter, but solar projects where we could actually purchase or manage energy. we have data to identify different resources in the city for small projects and there's more we can do. we have a staff of people who do this all day long in one format or another. they look at energy efficiency projects, municipal buildings, or for the airport. there's more we can do. >> do you have some numbers for us? >> no, i don't have numbers right now. i know there are different reports with different numbers for different kinds of projects. i can get those for you, but i don't have them right now.

if we were to buildup 300 megawatts in three years that would be fantastic. >> [speaker not understood] in san francisco? >> it wouldn't be ambitious. it wouldn't be as cheap as the power we could get from solar produced in the desert or hydro produced in yosemite. >> that would be rooftop or that would also include the airport and stuff like that? >> it would include all kinds of sites. the larger the site the more cost-effective it is of course. there are lots of creative financing and leasing and aggregating models with different businesses, solar businesses have been developing that we can take advantage of. >> and have you guys done any studies on deploying renewables in city and land outside of the city? >> yes, t